Women in the EU continue to be paid less than men. Not only because they tend to work in lower-paid jobs, but also for the same work in the same sector, women are paid less on average than their male colleagues. Most of the time, women don’t even know how much they are paid less because the wages are not publicly visible. This is now to change: The EU Pay Transparency Directive obliges companies to disclose how they pay their employees. This is to uncover and prevent a possible pay gap between men and women.
On 30 March, the EU Parliament approved new guidelines to address the issue of wage disparities between genders. The rules require companies in the EU to be open about their salary structures. Going forward, all salaries paid by a company must be made public. This will enable employees to compare their wages and recognize any discrepancies.
In the European Union, there is still a 13 percent average difference in hourly earnings between women and men. However, the extent of this gender pay gap differs significantly across countries. For instance, Slovenia, Romania, and Luxembourg have a pay gap of less than 4 percent, while Estonia and Latvia have the highest gaps at approximately 22 percent. Austria and Germany closely follow with gaps of 18.9 and 18.1 percent respectively.
The primary reasons for the gender pay gap are primarily rooted in structural factors.
The gender pay gap is primarily caused by structural factors, such as women in the EU being more frequently employed part-time and having fewer opportunities for managerial positions. Additionally, women tend to engage in unpaid care work more often. Certain professions, like nursing, which have a higher proportion of women, are also undervalued and receive lower pay. However, even when disregarding these structural factors, the gender pay gap still persists. In Germany, for instance, women with similar qualifications in the same industry earn an average of six percent less than their male counterparts.
Companies that have a workforce exceeding 100 individuals are required to reveal salary information.
The new pay transparency guidelines aim to eliminate the wage disparity between women and men. These guidelines require all salaries within a company to be made public. If the pay gap between women and men exceeds 5 percent in companies with over 100 employees, they will be obligated to find a resolution to ensure equal pay in the future.
Recruiters are not allowed to inquire about applicants’ current salary according to the EU Pay Transparency guidelines. This measure aims to prevent the occurrence of salary disparities.
Social partners will have a greater responsibility in enforcing the guidelines. Fines will be imposed on companies that fail to adhere to the wage transparency guidelines. Evelyn Regner, the chief negotiator of the S&D group, highlights that this is the sole method to guarantee adherence to the regulations.
The EU Pay Transparency Directive emphasizes the significance of transparency.
Regner, a member of the Committee on Women’s Rights and Gender Equality and Vice-President of the European Parliament, emphasizes the vital significance of transparency in achieving a fair and equitable society.
“I cannot reword”
Regner states that all employees will have the opportunity to openly discuss their salary both within and outside the company. This implies that non-disclosure agreements will no longer be permitted. Additionally, she emphasizes the importance of shifting the burden of proof from women having to take legal action to prove wage discrimination, to companies having to demonstrate the absence of such discrimination.
Wage discrimination is a systematic problem, not an individual one. Therefore, it should also be tackled systematically.